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TMI Blog1994 (12) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... which the said lay-off application was rejected by the Joint Labour Commissioner. Along with the said Writ Petition No. 11 19 of 1977, a number of similar writ petitions challenging the vires of Section 25-M of the Industrial Disputes Act and consequential prosecutional penalty for the lay-off in contravention of Section 25-M were heard by the Division Bench of the Madras High Court and by one common judgment, all the said writ petitions were disposed of. 2. The Division Bench of the Madras High Court inter alia held that Section 25-M as it stood under the said Amendment Act, 1976 was constitutionally invalid for the reasons given by this Court in invalidating Section 25-0 of the Industrial Disputes Act in the decision rendered in Excel Wear v. Union of India 1. The Madras High Court further held that in view of its finding that Section 25-M was constitutionally invalid, it was unnecessary for the court to go into the validity or otherwise of the orders passed by the authorities which had been impugned in some of the cases before the High 1 (1978) 4 SCC 224: 1978 SCC (L S) 509 :(1979) 1 SCR 1009 Court. The High Court also rejected the prayer for granting leave to appeal to this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uance of the lay-off has been refused, such lay-off shall be deemed to be illegal from the date on which the workmen have been laid off and the workmen shall be entitled to all the benefits under any law for the time being in force as if they had not been laid off. (6) The provisions of Section 25-C (other than the second proviso thereto) shall apply to cases of lay-off referred to in this section. Explanation.- For the purposes of this section, a workman shall not be deemed to be laid off by an employer if such employer offers any alternative employment (which in the opinion of the employer does not call for any special skill or previous experience and can be done by the workman) in the same establishment from which he has been laid off or in any other establishment belonging to the same employer, situate in the same town or village, or situate within such distance from the establishment to which he belongs that the transfer will not involve undue hardship to the workman having regard to the facts and circumstances of his case, provided that the wages which would normally have been paid to the workman are offered for the alternative appointment also. 4. Mr Kumar, learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employer might be correct yet permission could be refused if they were thought to be not adequate and sufficient by the State Government and no reason was required to be given in the order granting the permission or refusing it. It was also pointed out that the appropriate Government was not enjoined to pass the order in terms of sub-section (2) and Section 25-0 within 90 days' period of the notice. It was indicated in Excel Wear case' that even though a situation might arise both from the point of view of law and order and financial aspect that employer would find it impossible to carry on business any longer, permission could be refused even when the reasons for intended closure were bona fide but the authority concerned felt that the closure was against public interest, which reason would be universal in all cases of closure. Such provision with potentiality to pass unreasonable order was held to be beyond the pale of reasonable restriction permitted by Article 19(6) of the Constitution. 6. The learned counsel has submitted that Section 25-M and Section 25-N have common distinguishing features which make the said two provisions different from Section 25-0 the validity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking on its subjective satisfaction and there was no requirement for recording of reasons in the said order and in these circumstances, this Court held that the absence of a right of appeal or review or revision rendered the restriction as unreasonable. The learned counsel has therefore submitted that in view of the decision in Meenakshi Mills case2, the constitutional validity of Section 25-M cannot be challenged and Section 25-M and Section 25-N having common features and being clearly distinguishable from Section 25-0 of the Industrial Disputes Act, the reasons indicated in Meenakshi Mills case2 for upholding the constitutional validity of Section 25-N fully applies for upholding the constitutional validity of Section 25-M. The learned counsel has therefore submitted that the appeal should be allowed by holding that Section 25-M as it stood prior to Amending Act, 1984 was valid and orders passed under Section 25-M cannot be held illegal and void. 9. Dr Shankar Ghosh, learned Senior Advocate appearing for Respondent 1, Madura Coats Ltd., has however submitted that for appreciating the question of unreasonable restriction imposed on the fundamental right to carry on trade or b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Even in point of time, a restriction may have been reasonable if it amounted to a regulation of the hours of work in the business. But the aforesaid provisions of the Act have no reasonable relation to the object in view but the said provisions are drastic in scope that they go in much excess of the object. 11.Dr Ghosh has also referred to another decision of this Court in Dwarka Prasad Laxmi Narain v. State of Up4 In the said case, constitutional validity of clause 43 of U.P Coal Control Order, 1953 was taken into consideration and it has been held in the said decision that the licensing authority may grant, refuse to grant, renew or refuse to renew a licence and may suspend, cancel, revoke or modify any licence or any term thereof granted by him under the order for reasons to be recorded for the action he takes. Not only so, the power could be exercised by any to whom the State Coal Controller may choose to delegate the same. Such wide power including the power to delegate to any person of the choice of the Controller without any guiding principle was held to be unreasonable and far in excess of the reasonable restriction required to achieve the purpose. 12.Dr Ghosh has fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that unfettered restriction on the right to hold and acquire property and carry on trade and business activity can be imposed only on the score of social interest. He has also submitted that in Meenakshi Mills case2, the provisions for retrenchment under Section 25-N of the Industrial Disputes Act were taken into consideration but retrenchment is a crystallised or frozen occasion and the same should not be held on a par with the provisions for lay-off under Section 25-M. It has been contended by Dr Ghosh that if the distinction between lay-off and retrenchment and different types of problems associated with lay-off and retrenchment are considered in their proper perspective the reasonings for upholding the validity of Section 25-N should not be made applicable in deciding the vires of Section 25-M. Dr Ghosh has submitted that for the purpose of upholding the constitutional validity of a statute, upon a challenge on account of unreasonable restriction, the Court is required to look into the facts and circumstances and the ground realities under which the offending provision of the statute is to be applied. No strait-jacket formula, therefore, can be laid down for deciding the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he employer on compulsion cannot be held to be a normal incidence of a reasonable restriction on the employer's right to lay-off. Such provision may not even serve the interest of labour force because in the event of closure,, the job opportunity is bound to be affected and the economic interest of the nation is bound to be in jeopardy. Dr Ghosh has submitted that the problems associated with lay-off' have their special features and incidence and the principle underlying the restriction imposed on retrenchment under Section 25-N as considered in Meenakshi Mills case2 is not applicable on all fours in considering the reasonableness of the restrictions imposed in Section 25-M. Dr Ghosh has submitted that the broad features which weighed with this Court in holding Section 25-0 as unconstitutional in Excel Wear case1 are applicable in deciding the constitutional validity of Section 25-M. In the aforesaid facts, the impugned decision holding Section 25-M before amendment in 1984 as unconstitutional should not be interfered with and the appeal should be dismissed. 15. After considering the respective submissions of the learned counsel for the parties and considering various d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hil Kochuni v. State of Madras Kerala, AIR 1960 SC 1080 : (1960) 3 SCR 887 : Jyoti Pershad v. Administrator.for Union Territory of Delhi, AIR 1961 SC 1602 (1962) 2 SCR 125; Pathumma v. State of Kerala, (1978) 2 SCC 1 : AIR 1978 SC 771 10 Jyoti Pershad v. Administrator.for Union Territory of Delhi, AIR 1961 SC 1602 (1962) 2 SCR 125; Pathumma v. State of Kerala, (1978) 2 SCC 1 : AIR 1978 SC 771 11 Jyoti Pershad v. Administrator.for Union Territory of Delhi, AIR 1961 SC 1602 (1962) 2 SCR 125; Fatehchand Himmatlal v. State of Maharashtra, (1977) 2 SCC 670 : AIR 1977 SC 1825; Pathumma v. State of Kerala, (1978) 2 SCC 1 : AIR 1978 SC 771 12 State of Madras v. VG. Row, AIR 1952 SC 196 : 1952 SCR 597; State of U.P v. Kaushailiya, AIR 1964 SC 416 : (1964) 4 SCR 1002; Pathumma v. State of Kerala, (1978) 2 SCC 1 : AIR 1978 SC 771 necessary to examine whether such restriction is meant to protect social welfare satisfying the need of prevailing social values. (h) The reasonableness has got to be tested both from the procedural and substantive aspects. It should not be bound by processual perniciousness or jurisprudence of remedies (j) Restriction imposed on the Fundamental Rights guaran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C (L S) 509 :(1979) 1 SCR 1009 15 Kesavananda Bharati Sripadagalvaru v. State of Kerala, (1973) 4 SCC 225 : AIR 1973 SC 146 1; State of Kerala v. N.M. Thomas, (1976) 2 SCC 310 : 1976, SCC (L S) 227 : AIR 1976 SC 490; Pathumma v. State of Kerala, (1978) 2 SCC 1 : AIR 1978 SC 771 16 Workmen v. Meenakshi Mills Ltd., (1992) 3 SCC 336: 1992 SCC (L S) 679 which indicates that the employer's right is not absolute. We may indicate here that even in Excel Wear case1 it has been held that: the right to close a business is an integral part of the fundamental right to carry on a business. But as no right is absolute in its scope so is the nature of this right. It can certainly be restricted, regulated or controlled by law in the interest of general public. (emphasis supplied) 17.In Meenakshi Mills case2, it has been held that the power to grant or refuse permission for retrenchment of workmen conferred under sub-section (2) of Section 25-N has to be exercised on an objective consideration of the relevant facts after affording an opportunity to the parties having an interest in the matter and reasons have to be recorded in the order that is passed. The enquiry which has to be made u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licit, no further scrutiny is called for. There may be various other contingencies justifying an immediate action of lay-off but then the Legislature in its wisdom has thought it desirable in the greater public interest that decision to lay-off should not be taken by the employer on its own assessment with immediate effect but the employer must seek approval from the authority concerned which is reasonably expected to be alive to the problems associated with the industry concerned and other relevant factors, so that on scrutiny of the reasons pleaded for permitting layoff, such authority may arrive at a just and proper decision in the matter of according or refusing permission to lay-off. Such authority is under an obligation to dispose of the application to accord permission for a lay-off expeditiously and, in any event, within a period not exceeding two months from the date of seeking permission. It may not be unlikely that in some cases an employer may suffer unmerited hardship up to a period of two months within which his application for lay- off is required to be disposed of by the authority concerned but having undertaken a productive venture by establishing an industrial uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings indicated in Meenakshi Mills case1 in upholding the validity of Section 25-N squarely apply in upholding the vires of Section 25-M. It also appears to us that the impugned provision of Section 25-M satisfies various aspects of scrutiny for upholding reasonable restriction on the fundamental right when tested in the context of guidelines and principles indicated hereinbefore. The restriction appears necessary to us in larger public interest and to protect the interest of workmen, who, but for the restriction may be subjected to uncalled for lay- off. The application of this restriction to industrial establishments specified in Section 25-K duly takes care of the hardship which could otherwise be caused to small establishments. Directive Principles do require placing of the restriction on large industrial establishments employing large number of workmen. The impugned decision of the Madras High Court, therefore, must be held to be erroneous and the same is, set aside by upholding the vires of Section 25-M of the Industrial Disputes Act, 1947 which was introduced under the Amending Act of 1976. This appeal is, therefore, allowed without, however, any order as to costs. - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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